Room SD-106
Dirksen Senate Office Building
Washington, D.C.
Friday, January 19, 1996

CHAIRMAN BROWN: Oh, surely. Thank you.

Our next witness is the Hon. Frank Carlucci, whom I see in the back of the room. It's my pleasure to introduce him. He has a very distinguished career in public service spanning four administrations and a very wide variety of agencies.

He was both Deputy Secretary and, after a hiatus, Secretary of Defense. He was the Assistant to the President for National Security Affairs. He was Deputy Director of the Office of Management and Budget, and Deputy Secretary of Health, Education, and Welfare, and he's been an ambassador. That makes him a quintuple threat player, and I think makes his comments today of particular interest.

Secretary Carlucci, you're free to proceed.


MR. CARLUCCI: Thank you, Dr. Brown, Senator Rudman, members of the commission.

It is a great honor to appear before a group that has assembled such talent and experience, and I am sure you will reach sound conclusions which will contribute to enhanced effectiveness of our intelligence community.

Despite the pedigree that Dr. Brown mentioned, I sit before you with a feeling of inadequacy because, like many of you, and I have worked with most of the commissioners, I am a product of the Cold War and priorities have, of course, changed. I'm sure you've debated that at length.

During the Cold War, we took a look at regional disputes. The main aim was to prevent them from escalating into great power confrontations. Sure, we looked at nonproliferation issues, but those were overshadowed by the threat of nuclear Armageddon. Even terrorism had an ideological content to it.

Yes, we were involved in intelligence collection on drugs and law enforcement and economics, but those were at a second level, and the priorities were very clear. The claim on resources was very clear as well.

Today the situation, of course, is much different. The priorities are much harder to set. Intelligence collection and analysis calls for a very diverse collection of skills and techniques, calls for, in my judgment, more versatile people. It calls for more lateral integration between elements of our intelligence community.This is something that every DCI has tried to bring about, something that every Secretary of Defense has supported, but has not been fully realized. I'm delighted to see that John Deutch has set that as one of his priorities.

We also have new rules of the game. Our intelligence people, particularly our collection people, the DDO, are expected to deal with the more unsavory elements of society and, indeed, on occasion they do pay them for information. That's instantly translated in the press into support. There's a lot of Monday-morning quarterbacking on how you square that circle, because you have to deal with these elements if we are to get the information we need. It is an increasingly difficult problem.

Clearly, despite the end of the Cold War, we need clandestine intelligence. While the former Soviet Union doesn't exist any more, and Russia and the other former Soviet Union States are far more open societies, many of our targets are very closed societies. Countries like Iraq, Iran, North Korea have achieved enhanced importance from an intelligence point of view.

And as most of the commissioners are aware, we've not done a very good job penetrating a society like North Korea. There, lives are at stake, and we have to continue to pay attention to protection of sources and methods. I have been consistently troubled by the leaks that come out of our intelligence community. All you have to so is ask yourself, if you were a North Korean or Iraqi, knowing what you know about the leaks, would you sign up with our clandestine service?

As Dr. Brown mentioned, a number of years ago I worked at HEW, and I became involved in the health area. I like to think of an analogy between health and intelligence. When I was involved in HEW, there was an emphasis on therapeutic medicine, and we began to shift it to preventive medicine where there was more leverage.

Similarly, the military might be viewed as our therapeutic medicine. Intelligence is the preventive medicine. How much better it is to know about a terrorist attack before it happens, and stop it, than it is to retaliate after the fact, or to deal with a proliferator before he has an active program, or to head off a regional dispute before it reaches the confrontation stage.

Intelligence has at the same time become far more important to our military establishment. We used to refer to it as a force multiplier, and I used that argument in the eighties when I was Deputy Secretary to increase the intelligence budget faster than the DOD budget went up, and in the late eighties I used that argument to brake the decrease in the intelligence budget so that it went down more slowly than the DOD budget.

Today, intelligence is more than a force multiplier. It is an integral part of DOD operations. I'm sure many, if not most of you have seen the excellent DOD study entitled, The Revolution in Military Affairs, which makes it very clear that information dominance is going to be the key to future warfare.

On the policy side, it's of course a truism to say that policy is only as good as the intelligence on which it's based. Policy can also be bad if it is based on bad intelligence. I'm sure Dr. Brown remembers the Cuban brigade and all the time and effort that was put into that exercise, which turned out to be a rather worthless undertaking.

Is there a better model than we have today? Sure, there's always a better model. Our community needs to be dynamic. It needs to be more efficient. It needs to reengineer itself just like business reengineers itself periodically.

The areas that cry out for attention are the areas that Director Deutch has identified: budget, personnel, compensation.

I don't happen to favor an intelligence czar. I suspect that most of you don't as well. But I do agree that the DCI authorities can be strengthened.

I would give John reprogramming authority that he seeks. I would give him some control over the DOD intelligence budgets, and I would certainly give him consultation on major appointments, but let's be very clear about one thing. There can be no clear cut line of command in the intelligence world because there is shared responsibility between the DCI and the Secretary of Defense.

The Secretary of Defense cannot abdicate his responsibility. In effect, the intelligence community will always have to work for two bosses. There's going to have to be a cooperative relationship at the top, and we are certainly fortunate in having two people like John and Bill who can work closely together and who understand each other's programs.

I think there's perhaps been excessive emphasis on moving boxes around. Good people, of course, can make any organization work, and no matter what the organization, if you have bad people it won't function properly.

The emphasis really has to be on quality, on selection, training, and motivation of quality people, changing a culture where the goals are competence, trade craft, and professionalism.

Admiral Studeman succeeded in doing a lot of this at NSA, was bringing it to the CIA, and I would urge the commission to emphasize quality. At the risk of sounding critical -- I guess there is reason to be critical -- clearly there has been a problem in the DDO. I think the only word that comes to mind is bungling.

On the other hand, a lifetime of experience working with the clandestine service has convinced me that there is an enormous number of dedicated, competent people in the DDO, people who work their cover jobs by day, do their intelligence function by night, who get no recognition except a small ceremony with family and a few agency friends, people who come out after years of service with a blank resume and have trouble finding employment.

We need to preserve that kind of dedication. Introspection is fine, but let's not cross the line into bashing. I hope your report will represent a new beginning on this score.

Intelligence, of course, is only as good as it is relevant to the consumer. Having been a consumer as well, I can tell you that consumers want everything. Whenever anybody asked me, would I like intelligence on this, that, or the other thing, I would always say yes. It's was a freebie, and by and large it made interesting reading.

Well, that's of little help to the intelligence community in setting priorities. The intelligence community is by and large left to its own devices.

Some things are fairly clear. Where there's a crisis, or where there's a trip being planned, the intelligence community knows what is needed, but when it comes to the longer range, the more thoughtful pieces and how you deploy your collection assets, the guidance is unclear.

Unfortunately, I don't think there's a quick fix to this problem. Sure, you ought to have an NSC meeting, and certainly when I was National Security Advisor, we did that. I also remember that in the Carter administration we had some NSC meetings on intelligence priorities, and those were extremely useful. However, I would caution against setting up any kind of a staff structure to do this, because it could very quickly become staff driven, and the kind of priority-setting you need can only come from the top.

I think John Deutch has the right idea when he says that he spends a lot of time personally with the key players. I hope that includes the President, the Secretary of State and, of course, the Secretary of Defense.

I confess I'm a little bemused or puzzled by the debate between those who would say there's competition between military intelligence and national intelligence. I can't imagine the intelligence community ever short- changing the President, if that's what they mean. On the other side, intelligence is, as I mentioned earlier, absolutely integral to our military operations. My view is that they are mutually reinforcing, as long as they're well-coordinated, and I think the DCI has taken steps to do this.

This doesn't mean that the DOD organizational structure is ideal. I think the creation of an Assistant Secretary has helped. The DIA, as we all know, has never fulfilled its vision, although I gather the rules of the road are working.

I found when I was Secretary that there was some duplication in the analysis between DIA and CIA. I tended to read the CIA analyses first, but DIA was particularly useful on the military side.

When I was negotiating with then Soviet Defense Minister Yazov and was lecturing them, and that's the right word, on their military doctrine, DIA was very good in helping get me up to speed.

Covert action is a subject that's been given attention disproportionate to its size. I have viewed it from many perspectives, from the perspective of a Foreign Service officer on the ground, from somebody in the agency, from the perspective of policymaker.

I've seen successes and I've seen failures. I think we need to preserve the capability. We obviously need to try and change the image. The image, I guess, is one of a standing force of people who are ready to pull off a coup any time they're called upon to do so, or conduct a paramilitary operation. We all know that's not the way that it works.

Covert action is, by and large, built over a period of time through existing assets, and it's been used in a positive sense. It's been used in many cases to support democratic forces. This is an open hearing, so I can't cite examples, but in a closed hearing I could cite a number, including one that's particularly striking.

Should we have paramilitary capability? I don't see any reason to rule out that option, although, obviously, it ought to be used sparingly, and the Defense Department ought to be deeply involved, as it was in the Afghanistan operation.

There are those who would argue that, had we mounted an Afghanistan-type operation in Bosnia, we might not have 20,000 U.S. troops there. This argument has not been accepted, but it's an option that the President at least ought to have.

Law enforcement. I don't consider myself much of an expert. There's obviously tension between those who need to bring somebody to trial and those who need to protect sources and methods, and that issue has to be resolved on a case-by-case basis. I do know one thing, having spent 20 years of my life overseas. Multiple intelligence collection in one country can only lead to confusion. It can lead to false confirmation, it can blow cover, and it can be seriously damaging. I strongly recommend that we have only one collection agency per country.

Economic intelligence. My view is that the intelligence community can contribute. I don't know that it should be its primary focus, but in areas like technology transfer, or analysis of what OPEC is doing, I think the intelligence community can be very helpful.

I think they can also provide some support for trade negotiators, but I would not have them do commercial intelligence on the business world. Mr. Friedman, I'm sure you agree, I see no demand for the U.S. Government to get intelligence -- I've never been at a board meeting where somebody said, well, we need the U.S. Government to help us get intelligence, or we need more intelligence and why don't we turn to the U.S. Government. I think it would be very undesirable to have our intelligence community doing what in some instances, at least, business is prohibited from doing under FCPA.

I think we can all agree that congressional oversight is badly needed. My own view is that it's worked well, despite ups and downs. I am told that the committees are into excessive detail now. I would hope that they would confine themselves to strategy and oversight and not management, and I would hope also that in addition to criticizing when criticism is deserved, that they would defend the community when it deserves to be defended, and explain to the public the need for an intelligence community.

There's one aspect of oversight that has troubled me for sometime, and that is the ambiguity about whom the intelligence community works for. Does it work for the executive branch, or does it work for the Congress? I don't think you can serve two masters.

I have no objection to finished intelligence going to the Congress. I think, as I've said, oversight is vitally important.

But let me cite you an example. When I was National Security Advisor, we were conducting the Earnest Will operation. That was the escorting of the Kuwaiti tankers, and we were getting into increasing confrontation with Iran.

The intelligence community did a draft report on how Iran might react to our taking a strong position. Essentially the report said, no matter what you do to Iran, including military action, they're not going to change course.

Well, in the last analysis this proved to be incorrect, but that report was sent to Capitol Hill before it reached the National Security Council, and I found myself answering questions before I even had a chance to read the report. The executive branch has to have a chance to formulate policy before it responds to intelligence. That is a fundamental tenet of the proper functioning of government.

Probably the hardest question the intelligence community, indeed, the policy community (the executive branch and Congress) faces, is how to generate more public support for our intelligence community. We've all wrestled with this issue. I can remember even debating whether we should have a fictionalized series on the CIA like we have on the FBI.

The solution a lot of people come up with is openness. I frankly am not convinced. I think it's a bit of an oxymoron to have an open intelligence organization, and I do think, listening, Senator Warner, to your questions to Admiral Inman, that opening it up simply leads to more demands. Almost by definition the bad stuff comes out and the good stuff has to remain secret.

So I do not come down on the side of more openness, and that includes revealing the overall budget figure.

One thing is clear. For the intelligence community to be successful, we need strong presidential support and interest. We need strong congressional support and interest. Gimmicks won't work. We need straightforward explanations, less scapegoating, renewed emphasis on quality and competence. We need to rebuild. In my judgment, it's time to stop arguing and get on with the job, and I'm sure, Mr. Chairman, your report will contribute to doing just that.

CHAIRMAN BROWN: Thank you very much, Secretary Carlucci, and I appreciate your confidence in us and hope it's justified.

In recounting your background, I see I misstated. You're really a sextuple threat player. And to mix my sports metaphors, I observe that you've covered all the bases, just about.

I do have one question. I think your presentation has been very thorough and very helpful, but I would ask you, as someone who has been the National Security Advisor, what should be the role both of the National Security Council principals and of the National Security Council staff in setting priorities for intelligence, and managing intelligence requirements? And since the principals include the principal intelligence consumers, what role should the council or its staff have in assessing the performance of the intelligence community?

MR. CARLUCCI: I can't recall what structures the National Security Council has had over time, but when I came in as the National Security Advisor and, of course, that was in the wake of Iran-Contra, I totally reorganized the National Security Council staff. I did bring in an Assistant to the President to handle the intelligence function.

I think the National Security Council has an extremely important role, but we have to remember that the National Security Council is staff, and that it is the principals who should set the priorities. The National Security Council can feed suggestions, feed options to the principals, they can call them, they can convene meetings, but you have to get the attention of the principals.

Here, too, I think the President has to show interest. A Cabinet member is only going to pay attention and devote a lot of time and effort to this if he knows that that's what the President wants. The National Security Advisor can go to the President and say, Mr. President, we need a meeting, and here's what you have to do, and the President has to be willing to say, okay, I'm going to do it, and then convene the National Security Council.

And then the staff can lay out the various options. You can lay out the policies that you're going to follow, and a lot of staff work can be done on how you collect, against those policies, but once again, it's that personal interaction at the top that will make the system work, and I don't see any way to change it. It's as much personality-driven as it is institutionally driven.

CHAIRMAN BROWN: Thank you very much.

Senator Rudman.

VICE CHAIRMAN RUDMAN: Thank you very much.

Secretary Carlucci, I have two questions for you. They're based on the fact that, of all of the witnesses today, you've had the experience of being both Secretary of Defense and National Security Advisor to the President. So I'm going to ask these two questions, and your views would be very important.

First, there has been a great deal of discussion within the Commission and some this morning, and with other witnesses that we've interviewed, about the Defense Intelligence Agency's human source collection activities, its clandestine activities.

We heard Admiral Inman this morning talk about a consolidation of the clandestine services. Whether you've got that model or not, the real issue is whether or not we're getting too much proliferation in that area, and whether or not the DIA ought to pull in its horns in that area, and have its clandestine work be more directly a job for the Agency itself. First, your comment on that.

MR. CARLUCCI: Without being current on the subject, and I have to emphasize that point, I really don't know what DIA is doing and shouldn't know what they're doing in clandestine collection.

I can say that -- and this goes back to my days as Deputy Secretary -- I had some unhappy experiences with the military services, in particular the Army, on humint activities, and I had to put in a whole series of procedures.

VICE CHAIRMAN RUDMAN: What year was that?

MR. CARLUCCI: About 1983.

VICE CHAIRMAN RUDMAN: Three, I believe. I'm well aware of that instance.

MR. CARLUCCI: I think it was absolutely shocking. I was outraged by what was going on, and I borrowed a lot of procedures from the CIA and put them in place.

I think the services or DIA ought to be able to conduct some humint activities directly related to military operations, but they need to be confined to that area. When they start stepping over the bounds and go to broad collection activities, then I think we are on a very slippery slope. I think we're going to get into the kind of problem I mentioned earlier with regard to multiple collection in a given country.

So either DIA or the services ought to have humint. I would not allow both of them to have humint, and I would have very rigid controls over it. I wasn't here, but I gather Admiral Inman would move the DDO out of CIA. I would not do that. I would rather concentrate humint in CIA and fix the problem in CIA through better personnel management, clearer guidance, and those kinds of managerial steps.


My second question, again, is based on the two unique positions that you held. We've heard a lot of testimony that long-term planning, and I mean "long" as defined as really looking out there, in the intelligence community, like in many American corporations, is not done adequately, and that people tend to deal with the immediate issues, those that have to be solved now.

That is where, obviously, you have to put your priorities. But in doing so, the truly long-range technological needs, and other needs of the intelligence community aren't really being met. And we've had some evidence that during the earlier days of PFIAB, under several Presidents, did that particularly well, I believe, Mr. Chairman, in the area of collection.

In fact, some of the most extraordinary work in establishing the regime of collection came out of PFIAB years and years ago. Do you have any thoughts on where, in this Government, or how we might improve what I guess I can only call long-range strategic thinking as to the needs of the intelligence community? Because we tend to find a gap in that area, and I think most commissioners would agree.

MR. CARLUCCI: That's a very hard question, Senator Rudman. You're quite right, it's not being done. I've never seen it being done, but I don't see it being done at the policy level either. Day-to-day events tend to drive almost every administration, and when you set up some kind of a separate organization to do long-range planning, they're disconnected from the gears. They become eunuchs, so that doesn't seem to work either.

I think the most you can do is call attention to the problem and encourage administrations to do this both in the policy and intelligence area, because intelligence has to follow policy. It has to be based on how policymakers would like to see policy evolve.

Of course, the intelligence community can assist that process by coming up with the shape of the world in the year 2020, and perhaps that ought to be a standard demand.

The Congress has mandated a national security assessment which is done every year. Maybe as part of that national security assessment they should call for a long-range intelligence assessment of what the shape of the world is going to be in 5 or 10 years and build it into that process.

Some administrations have made the National Security Strategy Assessment a useful document. In other administrations, it's been purely an academic exercise.

VICE CHAIRMAN RUDMAN: Looking at the whole imagery system that we all take for granted today, and we can't talk about much of it in open session. Much, of course, isn't in the public arena. But looking at that area today, we take much for granted.

When you look at how it developed, the fact is that this very small board, that happened to be blessed with some members with enormous technological backgrounds, worked on this issue while, as you say, everyone else was working on the problem of the day. Yet PFIAB suddenly came up with a proposal and said, look, you can do this, and this is what it will do for you 10, 15 years out. And that's precisely what happened. I hate to think what would have happened if they hadn't done it, but I think your answer is that we ought to call attention to it. I'm sure you wouldn't object if we found a way to get it done.

MR. CARLUCCI: No. Let me say -- and General Allen may recall that when I was Secretary I took a group of about six people, the smartest people I could find -- Phil Carter headed the group -- and I said, you go over to NDU, you just sit there and think. You don't report to anybody but me, and you come back to me with whatever subject -- I want you to think about the future, whatever subject you want to come back on, and they came in with some very useful information.

It drove the bureaucracy nuts. When I walked out the door they were instantly killed, but I always found that kind of technique useful. I did that in several other agencies, set up a group -- you've got to pick very good people to do this -- that is disconnected and can think through the issues. It only works if they report to the top, and the bureaucracy, as I say, hates it. You can't have them reporting down below.

VICE CHAIRMAN RUDMAN: Thank you very much.

CHAIRMAN BROWN: Other questions. Who would like to ask? Yes, Mr. Goss.

MR. GOSS: Thank you very much.

Mr. Secretary, I was very interested in what you had to say about oversight, and I appreciate your comments. I think they're very much on target.

The one thing I did want to ask relates to your caution about not having Congress get into micromanagement of the detail. I agree with that. I'm not sure what your version of micromanagement is. The members of the oversight committees, and I will only speak for my side of the Hill, generally are put in the position with their colleagues of having to say, "We've really looked into this. It's okay, trust me, and I will allocate this amount of dollars for it." That's a tough position to put a Member of Congress in with his or her colleagues. But nevertheless it has worked, I think, extremely well.

The question of whether you think we are getting into micromanagement or not needs to be balanced by that. But I'd appreciate your observations on that, because we do try to build a constituency for intelligence. It's part of our job, I think.

My second question. You mentioned the damage caused by leaks. I would appreciate your views on whether you think there are more leaks from the Hill or from downtown, and whether there's something we can do about it, because we'd all like to.

MR. CARLUCCI: On the first, what I think I said was that I have been told that the Congress is into micromanagement. I obviously do not have first hand experience. I think the line clearly has to be drawn at sources and methods. Whether I was accurately informed or not, I was told that staff members are into sources and methods, and I think that, in my judgment, is not necessary for effective oversight if that, in fact, is the case.

Leaks come -- I was not pointing a finger. Leaks come from both sides. They're deplorable. I think by and large far too many people have access to information. I know the Congress has made a serious effort to tighten up on security, and I commend them for it.

And in part the problem isn't as much the actual leaks. When you're dealing overseas, it's the perception -- you know, you've been there -- the perception of our society, with its Freedom of Information Act, investigative reporters, the Walter Pincuses of this world, and what-have-you, that leads these people to say, boy, I don't want my name in their files. That's another reason why I think it's very important that Congress make it clear that they are not into sources and methods, whatever the case may be.


MR. DEWHURST: Mr. Secretary, thank you. I wanted to ask a question based upon your unique experience as Secretary of Defense and also the Assistant to the President for National Security Affairs.

There have been a number of problems talked about in not only the Agency, the CIA, but in the Community. A number of these are being addressed. One that I am not sure is being addressed is the relationship between the Community and the customer.

I am a businessman. Whether you are a big business or a small business, you only stay in business and grow, as you know, if you're focusing on your customer. There's a dialogue. It's constructive, and the customer is satisfied.

A number of the policymakers that have come before the Commission have voiced different degrees of understanding of intelligence. And a number of us have been left with the feeling that the product of the Community could be better used if there was better cooperation, and better customer understanding.

This is a long way to ask my question, but as we travel and visit with our allies, not only in Europe but in the Far East, one of our allies had an interesting approach. In essence, they had a consumers council. They have the users of the intelligence, on a monthly basis, sit down and reevaluate, within the national policy strategy, what the intelligence priorities are, looking forward for the next month, and lookin at the short term, medium term, and long term. But more interestingly, or perhaps more beneficial, they also look backwards and deal with accountability, something in business you have to have. I don't see that much in the intelligence community.

Of course, our country, the United States, is so much larger than the ally that I have in mind. But would this work in the American Government? Could we put something like this, if the President agreed, in the NSC? Is that an area in which you could have better coordination and better evaluation of the products of our different agencies?

MR. CARLUCCI: What you're talking about is periodic goal-setting, or a periodic assessment of what the strategy --

MR. DEWHURST: On a monthly basis, sitting and looking at both the targets as they change for the Government, and being able to coordinate more quickly. And also looking back, judging what we're doing, where are there deficiencies, where can we do better?

MR. CARLUCCI: That can be put in the NSC mechanism.

As you know, in business a lot of companies have -- well, first of all, the best way -- the best way, as you know, to deal with your customer is to be close to him and to have a lot of personal contact, but secondly, a lot of companies have customer satisfaction reports that they ask their customer to fill out. That comes very close to what you're suggesting.

The danger in Government, though, is that you don't have that same premium on the customer that you have in business. You don't have the bottom line orientation. The Secretary of State is not going to sit down and fill out a customer satisfaction report. If the President calls a meeting, he'll go to a meeting and he'll respond, so it gets back to direction from the top.

If the President says, this is going to be a procedure, and we're going to make the intelligence community more effective by having these monthly reviews, and we're going to husband the resources by setting the priorities, and you people on the policy side are going to be the ones that set the priorities, he tells the community it should not set its own priorities, then the message will get across. Then, I think, your system would work.

Once again, a lot of it is very personality driven.

CHAIRMAN BROWN: Mr. Fowler is next.

SENATOR FOWLER: I think I'll use your ambassadorial title. Everybody has used different ones.

Mr. Ambassador, you raised the question of economic espionage. Should economic collection be a part of multilateral negotiations?

MR. CARLUCCI: I think the people who are negotiators ought to have access to a full range of intelligence information. If you're saying, should we target a particular negotiation team, I think that depends on the circumstances. Should it be part of our collection priorities? Yes. I don't see anything wrong.

SENATOR FOWLER: Well then, how do you assess the risk to democratic allies, be they bilateral or multilateral, by conducting this kind of collection?

MR. CARLUCCI: Well, Senator Fowler, I'd be very surprised if there's a country in the world that doesn't do this kind of thing. The answer to your question is, you have to do it well. You don't get caught. It gets back to tradecraft. It also gets back to a question with policymakers. If the policymakers say, this is what we need, then I think the intelligence community ought to do it, but we clearly need to have better tradecraft than we have now.

SENATOR FOWLER: Another quick question on another subject that you raised. When you talked about recommending no more than one collection agency per country, how should our Government resolve the ongoing conflict between the FBI, who see their efforts abroad when appropriate under the law to result in prosecutions and convictions, and our intelligence community, who insist on protecting their sources? This seems to be in some cases a matter that needs to be resolved.

MR. CARLUCCI: I think it has to be done -- it clearly has to be done on a case-by-case basis.

If the Director of Central Intelligence and the Director of the FBI cannot agree, then obviously the matter has to be put into the hands of the National Security Council. That's what the National Security Council was created for, resolving that kind of thing. I've never seen that kind of dispute escalate to that level. Perhaps some of them should, but I don't think you can set up any hard and fast rule.

SENATOR FOWLER: But you see that as unquestionably the task of the National Security Agency to resolve?

MR. CARLUCCI: Not the National Security Agency, the National Security Council.

SENATOR FOWLER: I'm sorry. I do know the difference. Thank you for correcting me.

MR. CARLUCCI: Yes. When you reach an impasse, I think the DCI and the Director of the FBI, the Attorney General, have to take it to the National Security Council for a resolution.

SENATOR FOWLER: Thank you very much, Mr. Chairman.

CHAIRMAN BROWN: General Pursley.

GENERAL PURSLEY: Mr. Secretary, you outlined an interesting premise that intelligence can be looked upon as a force multiplier, and you indicated, if I understood correctly, that this was part of the guiding philosophy during the 1980's, and perhaps even extending to the 1990's.

MR. CARLUCCI: Correct.

GENERAL PURSLEY: How can that particular premise be demonstrated practically, that in fact incremental additions to the intelligence budget do provide even larger and perhaps even disproportionate kind of benefits? Or if you took the budget the other way, that you would have disproportionate penalties attached to reducing it? Can that be demonstrated, and if so, what implications does that have, now and in the future, for the overall size of the intelligence budget?

MR. CARLUCCI: I think it has been demonstrated, General Pursley. I think it was demonstrated during Desert Storm, and I commend to you, if memory serves me correctly, Bill Perry's article in Foreign Affairs on Desert Storm, where he highlighted the importance of visibility of information dominance. I think the study, Revolution in Military Affairs, which I have cited, also documents the case fairly well.

This is the reason the joint intelligence centers have been set up under the CINCs. I think that's a very good move, so that they can integrate all-source intelligence. We can get imagery to the field immediately. The key to future warfare, in my judgment, and I'm no military man, is not going to be massive use of force, but it's going to be the quick and effective use of force based on information technology, and calling in support from behind the lines, long-range precision strike weapons, all of which cry out for enhanced intelligence collection capability.


CHAIRMAN BROWN: Ms. Baird, and I will make this the last question. And although Ambassador Lilley is here, I think I'll give the commissioners a 10-minute rest.

MS. BAIRD: Secretary Carlucci, thank you for appearing today. You have sat in many seats where you've been consumed with the question of how to create public understanding and support for budgets, whether it has been at OMB or HEW, or even in the White House, I presume. And I wonder if you might reflect for us on what the most compelling understandings need to be in the public mind about the threats against which we are trying to protect ourselves through the collection of intelligence in support of the kind of budget that we have now, and that I'm presuming you support from what you've said.

And I ask this question because, obviously, a lot has gone unstated for many years because of the Cold War threat. And I wonder if you can reflect from those years of trying to create public support for budgets, on how we should be thinking about this question.

MR. CARLUCCI: That's a very difficult question to answer. I go back, in retrospect -- a lot of people say, well, in the Cold War it was easy. In the 1980's, when we set about to rebuild our defense establishment, based in large part on the weapons systems Harold and his people had developed, we had a hard job convincing the public and convincing the Congress, and we used a lot of intelligence information.

It's also fashionable to go back and say, well, a lot of that information on the Soviet Union was wrong. We can get into that kind of argument, but the collection on the military might of the Soviet Union, particularly the technical collection, was not wrong, and we were able to use imagery very effectively.

I can remember we had sessions with the entire Congress using imagery and sigint, closed sessions which proved to be very effective, and we had individual sessions, and embarked on a very major campaign. Much more difficult now to convince the people of this country, and even the Congress, that Iraq is a real threat, or that we need to worry more about Iran, but I think you're going to have to make the same kind of effort.

It can be done more openly now, because it's basically a policy question. Why is Iraq a threat? Why do we need to maintain stability in the Middle East? What would happen if North Korea were to strike Seoul?

I think there has to be a more intensive effort to explain to the American people what the real relationship between these very distant foreign policy issues and their day-to-day lives are now that the Cold War is over.

My own judgment is that the American people are not isolationists. In fact, isolationist is a term of opprobrium these days, and people recognize that their jobs are at stake if we become isolated from the rest of the world, so I think the effort really has to come from the administration and the Congress to talk about these kinds of issues, and to say, here is why these threats are real threats to your own job security over a protracted period of time. It is a hard case to make, I agree, but I think there's no alternative to trying to make it.

CHAIRMAN BROWN: Thank you very much. We will take a 10-minute break, and then we'll resume with Ambassador Lilly. Thank you very much, Frank. We appreciate it.